liza y asked:
I had an accident with a table saw resulting in the amputation of several fingers. I did not have health insurance at the time. I sued the owner of the table saw and received a settlement through their homeowner’s insurance. Are the medical expenses deductible?
Not unless your medical expenses exceeded what you received in the settlement. You could only deduct the amount of the excess expenses that exceeds 7.5% of your income on 1040 line 38.
Schedule A specifically says “Caution. Do not include expenses reimbursed or paid by others.”
The settlement is not taxable–it’s for personal injury.
However, any medical bills it pays for are not deductible a second time….